Exercise 2-1 (Algo) Transaction analysis [LO2-1] The following transactions occurred during March 2024 for the Right Corporation. The company operates a wholesale warehouse. 1. Issued 22,000 shares of no-par common stock in exchange for $220,000 in cash. 2. Purchased equipment at a cost of $24,000. Cash of $6,000 was paid and a note payable to the seller was signed for the balance owed. 4 3. Purchased inventory on account at a cost of $68,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $80,000. The cost of the goods sold was $48,000. 5. Paid $3,250 in rent on the warehouse building for the month of March. 6. Paid $5,350 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2024. 7. Paid $48,000 on account for the inventory purchased in transaction 3. 8. Collected $36,000 from customers on account. 9. Recorded depreciation expense of $600 for the month on the equipment. Required: Analyze each transaction and show the effect of each on the expanded accounting equation for a corporation. Note: Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.

Exercise 2-1 (Algo) Transaction analysis [LO2-1] The following transactions occurred during March 2024 for the Right Corporation. The company operates a wholesale warehouse. 1. Issued 22,000 shares of no-par common stock in exchange for $220,000 in cash. 2. Purchased equipment at a cost of $24,000. Cash of $6,000 was paid and a note payable to the seller was signed for the balance owed. 4 3. Purchased inventory on account at a cost of $68,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $80,000. The cost of the goods sold was $48,000. 5. Paid $3,250 in rent on the warehouse building for the month of March. 6. Paid $5,350 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2024. 7. Paid $48,000 on account for the inventory purchased in transaction 3. 8. Collected $36,000 from customers on account. 9. Recorded depreciation expense of $600 for the month on the equipment. Required: Analyze each transaction and show the effect of each on the expanded accounting equation for a corporation. Note: Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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